Pak grants MFN status to India

“After a lengthy discussion and a briefing by the commerce secretary, the Cabinet unanimously approved the commerce ministry’s summary to grant Most Favoured Nation status to India,” Pakistan information minister Firdous Ashiq Awan told a news conference

Islamabad: After dilly-dallying for several years, Pakistan on Wednesday granted the Most Favoured Nation (MFN) status to India in a significant step in improving bilateral ties and boosting two-way trade currently standing at $2.6 billion, reports PTI.

“After a lengthy discussion and a briefing by the commerce secretary, the Cabinet unanimously approved the commerce ministry’s summary to grant Most Favoured Nation status to India,” Pakistan information minister Firdous Ashiq Awan told a news conference.

The MFN status, which means that Pakistan will give trade treatment to India at par with its other partners, is likely to boost the bilateral economic ties. India had granted the MFN status to Pakistan way back in 1996. In 2010-11, India- Pakistan trade stood at $2.6 billion.

Pakistan’s move to grant MFN status to India comes ahead of the 10-11November SAARC Summit in Maldives, where the prime ministers of the two countries are expected to meet.

All stakeholders in Pakistan, including the military, were ‘on board’ for the decision to grant MFN status to India, Ms Awan said.

“The decision will lead to economic benefits and it is in the national interest,” she said, adding that granting the MFN status to India would not in any way affect Pakistan’s stand on the Kashmir issue.

During the meeting of the Cabinet chaired by prime minister Yousuf Raza Gilani, several ministers raised concerns on issues like Kashmir which were discussed at length, Ms Awan said.

“Some Cabinet members had concerns about Kashmir, political issues and defence and strategic relations,” she said in her opening remarks.

“Others raised issues related to national sovereignty and Pakistan’s territorial integrity. The Cabinet’s decision will cause no harm to the Kashmir cause,” she said.

“Trade (with India) is a separate issue. It is a most important priority for Pakistan to continue its support for the Kashmir issue and the movement (for the right to self-determination),” Ms Awan, a senior leader of the ruling Pakistan People’s Party, said.
Ms Awan pointed out that China, one of Pakistan’s closest allies, had bolstered its trade relations with India despite territorial disputes between the two countries.

“We cannot live in regional isolation,” she said.

Responding to a question on whether the Kashmiri leadership had been consulted on the decision to grant MFN status to India, Ms Awan said the two parts of Kashmir were already conducting trade across the Line of Control.

Bus services too were operating across the LoC, she said.

Ms Awan said commerce minister Makhdoom Amin Fahim had briefed the Cabinet about how he had engaged the Kashmiri leadership on the MFN issue.

After India granted the MFN status to it in 1996, Pakistan had held out on reciprocating the move, largely due to opposition from religious groups and some political parties which felt that extending the MFN status to New Delhi would affect Pakistan's stand on the Kashmir issue.

Meanwhile, commerce secretary Mahmood said trade between India and Pakistan had continued uninterrupted between 1948 and 1965. During this period, the two countries signed 12 bilateral trade agreements.

After the war of 1965, all these agreements were suspended, he said.

The countries initially conducted trade under the General Agreement on Tariffs and Trade.

After the World Trade Organisation replaced GATT, India granted MFN-status to Pakistan, he said.

Following Pakistan’s decision to grant MFN-status to India, both countries will dismantle non-tariff barriers and facilitate trade, Mr Mahmood said.

“In this regard, the two countries will hold a commerce secretary-level meeting on 15th November,” he said.

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COMMENTS

Anil Agashe

5 years ago

Welcome news! Rare foreign policy success for the government! needs to be taken forward quickly.

PDS consumers can soon have choice to buy goods or get cash

While suggesting a two-phase strategy to revamp the PDS network, the task force headed by UIDAI chairman Nandan Nilekani said it is desirable the beneficiaries are provided choice of location and mix of commodities and quantities. They can also opt for direct cash subsidy

New Delhi: Public distribution scheme (PDS) consumers will soon have a choice to either get subsidised goods from their preferred locations or receive cash, with the government accepting in principle suggestions of the Nandan Nilekani-headed task force on revamping the Public Distribution System, reports PTI.

These suggestions form a part of the report of the task force on ‘IT strategy for the PDS’ submitted to the finance minister Pranab Mukherjee on Wednesday.

After presenting the report to Mr Mukherjee, Unique Identification Authority of India (UIDAI) chairman Mr Nilekani said the government has in principle accepted the report of the task force and “it (government) will now process the report and take appropriate action”.

While suggesting a two-phase strategy to revamp the PDS network, the task force said it is desirable the beneficiaries are provided choice of location and mix of commodities and quantities. They can also opt for direct cash subsidy.

Under the current system, a consumer can only buy goods from an assigned ration shop in set quantities.

There are about 4.62 lakh fair price shops (FPS) which distribute commodities, like wheat, rice, sugar and kerosene, worth over Rs30,000 crore every year to 18 crore families.

To check pilferages in the PDS, the task force has suggested extensive use of IT platform and Aadhaar-based bank accounts for providing subsidised food or cash transfers.

Recommending an institutional mechanism for end-to-end computerisation of PDS, the task force has also suggested creation of a National Information Utility or Public Distribution System Network (PSDN) by April 2012 and initiation of pilot projects by December 2012.

The report said Aadhaar (unique national identity card) can be used in PDS to simplify a number of processes.

The focus in the first phase will be on information visibility and transparency, the report said, adding computerisation of ration card is essential.

Aadhaar integration will be implemented in phase II, when sufficient Aadhaar coverage has been achieved.

Mr Nilekani said, “The large focus of the report is to make system more efficient (and) to make sure people have choice.”

The report pointed out that true PDS beneficiaries suffer due to “wholesale problems such as large-scale pilferage and diversion... duplicates and ghost beneficiaries, wrongful exclusion and inclusion.”

Mr Mukherjee asked the ministry of consumer affairs and food and public distribution to examine the recommendations for implementation in a time-bound manner and, if required, to seek the guidance of the EGoM for unresolved issues.

“Participation of states in the PDSN would be voluntary and would not hamper the current efforts in computerisation of the PDS in states,” the finance ministry said in a statement.

The report talks of effective computerisation as a must to achieve the scale, speed, cost-effectiveness, and quality in operations, while respecting the federal structure of the country.

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India may consider financing bailout of Eurozone: FM

“...let them (Eurozone) make a credible assessment of solvency issue, try to sort out those problems and then supplementary financing could be considered. Let us see what the leaders decide,” finance minister Pranab Mukherjee told reporters

New Delhi: Finance minister Pranab Mukherjee Wednesday hinted at financing for sorting out Eurozone crisis after a credible assessment of solvency problem is made, reports PTI.

“Our assessment of the situation is let them (Eurozone) make a credible assessment of solvency issue, try to sort out those problems and then after supplementary financing could be considered. Let us see what the leaders decide,” he told reporters.

He was replying to a query on the Greece government’s decision to seek referendum on a proposed EU (European Union) rescue package which has created a fresh turmoil in the financial markets.

Mr Mukherjee said at even at the G-20 finance ministers meeting in Paris, India had maintained that the European solvency issue should be sorted out by the European nations themselves.

“Let us see what the leaders decide (at the Cannes G20 meeting beginning Thursday),” he said.

Prime Minister Manmohan Singh has left for France to participate in the two-day summit of world’s 20 leading economies (G20) to signal a “strong and coordinated approach’ to put the global economy back on track, while addressing medium term structural issues.

Several European nations, including Greece, Portugal and Spain, are facing financial problems and a sovereign default is expected to have a severe impact on the whole region.

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